Public Liability and Professional Indemnity what’s the Difference?

As the two most common insurance types, Public Liability and Professional Indemnity insurance are so sought after because of the broad cover and security, it provides for small and large business owners alike.

We’ll take a look at the differences between these two insurance types in this article, and how to determine if your business would benefit from either, or both.

Public Liability Insurance | What is it and what does it cover?

Public Liability insurance was developed to protect business owners from accidental damage or injury due to negligent business activity, sustained by a customer, supplier, or member of the public.

The most common source of claims is by customers of your business, and Public Liability insurance has helped keep many business owners’ doors open.

What does Public Liability Insurance typically cover?

The amount of cover your insurance policy will provide depends on the terms of your policy and the extent of the cover you choose.

Here is a brief list of what is commonly included under Public Liability insurance:

  • Injury to any person
  • Obstruction, loss of amenities, trespass, nuisance, or interference with any right of way, light, air, or water
  • All sums that the insured is legally liable to pay, due to any claim that is first made against the insured during the insurance period, in respect of bodily injury, death or loss of, or damage to property
  • Damage to third-party property as a result of the spread of fire from the insured property
  • Movement of motor vehicles – Liability arising in connection with moving a motor vehicle for the continuation of the business
  • Security firms
  • Cross liability

What is usually not included under Public Liability insurance may differ from policy to policy, but there are common exclusions, such as:

  • Recall
  • Advertising
  • Deliberate acts
  • Defective design

Professional Indemnity Insurance | What is it and what does it cover?

Professional Indemnity insurance, also known as Professional Services insurance, is designed to protect you from claims, against you and your business, as a result of negligent acts or omissions in your business operations. These occupations usually include architects, accountants, consultants, and even landscapers.

Examples of Professional Indemnity insurance claims:

  • Providing the wrong treatment or diagnosis
  • Wrong advice provided
  • Misinterpretation/Miscalculation/Overestimation

What does Professional Indemnity Insurance typically cover?

We’ve listed out a brief list of the most common inclusions in Professional Liability insurance:

  • An award of legal costs against you  
  • Costs of disciplinary proceedings
  • Compensation payment as a result of a claim
  • Defending or responding to the claim at reasonable legal costs
  • Claim the costs of  investigation

All inclusions and exclusions in any policy will depend on certain variables, such as your business occupation, staff count, operational activities, etc.

Here, we’ve listed out the most common exclusions you’ll find in Professional Indemnity insurance:

  • Professional fees  
  • Intentional damage  
  • Dishonesty and fraud 
  • Contractual liabilities 

How to find out if your business needs Public Liability, Professional Indemnity insurance, or both

Suppose there is a chance that when you are faced with a public liability claim, the financial impact of paying the claim and associated legal fees could potentially put you out of business. In that case, you probably need Public Liability insurance.

Another important aspect to consider is whether you or your employees interact with others while doing business in any way.

If your business operations rely on customers, as all businesses do, you may need to investigate Public Liability insurance.

Because business owners have a legal responsibility to take steps to ensure the safety of their customers, suppliers, the community, and their property – it is always prudent for business owners to have protocols in place for inevitable accidents.

Most Public Liability policies can also extend to cover Product Liability and Defective Workmanship.

If you sell, supply, or deliver goods, even in the form of repair or service, you may need cover for negligence claims against your business – where your products or workmanship has caused injury, death, or damage. 

Don’t let the stress of finding the right insurance type be the reason your business is left unprotected.

At Bi-me, We’re fiercely committed to the small business community, whether it’s to get a better deal or to assist with a claim. One of our core values is that ‘no policy is too small for us’, and we’ll go the extra mile for everyone.

Our digital journey makes insurance brokerage simple by creating an efficient digital-first solution for buying insurance.

You can get instant online quotes available 24/7 – for purchasing insurance, making changes to your policy, or getting documents. Our website is mobile-friendly, so you can even add cover while on the move.

*This is general information only and does not take into account your financial situation, needs, or specific objectives. As with any insurance, cover will be subject to the terms, conditions, and exclusions contained in the policy wording.